The demand for health information exchange (HIE) solutions among healthcare providers has never been higher, and it will continue to grow over the next 12-24 months, according to a recent report from research firm CapSite Consulting, Williston, Vt. The survey’s authors spoke with more than 340 hospitals, with 79 percent of the respondents either indicating they are in an HIE or plan to be a part of one in the near future.
The study is part of CapSite’s efforts to capture how the American Reinvestment and Recovery Act/Health Information Technology for Economic and Clinical Health (ARRA-HITECH) is affecting investments among healthcare providers. As the industry prepares to move beyond Stage 1 of meaningful use, CapSite senior vice president and general manager Gino Johnson says the research firm has put a microscope on HIEs to understand how hospitals are sharing health information.
Johnson says the market for HIEs is far from saturated, in contrast to other healthcare technologies that are currently in replacement mode. Most organizations are making their first investment into an HIE, one reason for its increasing prominence in the healthcare budget.
There is pressure from regulatory bodies, which are offering provider organizations incentives to share information electronically. “As the stimulus looks to foster the environment where health information is shared, there are requirements as you move into Stage 2 around the exchange of health information,” says Johnson.
Essentially, the dramatic shift to HIEs is all about meaningful use and the upcoming Stage 2 and 3 requirements and subsequent incentives. This, Johnson says, is why the timeline for HIE implementation for most organizations is 12-24 months, as evidenced by CapSite’s study.
In terms of products offered within an HIE, the most-invested core infrastructure service over the past two years has been the master-patient index (MPI). Approximately 70 respondents said their organization has invested in MPI solutions. MPI, Johnson says, prevents duplication of a patient’s record within the same healthcare system.
Of the other listed core infrastructure services, approximately 40 organizations invested in authentication as well as document sharing, and about 30 groups have invested in record locator services.
Johnson says that in an effort to reduce medical errors, organizations have invested in ePrescribing solutions in higher numbers as well, with over 90 respondents in the survey having done so already. “ePrescribing is one of the areas medical providers have moved to, to get away from problems and medical errors from misreading handwriting,” he says. “There have been high profile examples of those kinds of errors that have been documented.”
The list of planned investments from healthcare organizations into specific HIE solutions read off like a Stage 2 and 3 meaningful use shopping list, says Johnson. For instance, more than 140 organizations said they will invest in an immunization reporting solution for their HIE and nearly 160 organizations will do the same for results reporting. Both are expected requirements of meaningful use in the future.
Viable Vendor Market
The freshness of the market is clear when looking at CapSite’s findings on HIE vendor market share. All told, the report listed 18 vendors; the highest market share belonged to Medicity, with only 12 percent. “Looking at this space, there are a tremendous amount of companies that have come out of the woodwork when they’ve seen the stimulus money that has been set aside to drive adoption of HIE,” he says. “Every day we see companies popping up on our radar that are trying to position themselves as an HIE vendor.”
With so many technologies encompassing an HIE, Johnson says a vendor could find a niche for one or two HIE-related solutions such as ePrescribing, MPI or physician portal. Others could find have more complete HIE solutions. This kind of range opens the market up to a wide variety of vendors as well as new entrants in the future.
However, he does say consolidation is likely to happen as the market develops. Already, Aetna acquired Medicity for $500 million in December of 2010 and Ingenix acquired Axolotl in August of 2010.
CapSite’s survey also looked at HIE consultants and the market share within that specialty. Much like the market for HIE vendors, the market for this specialty is also convoluted. According to the survey, 47 percent of the respondents said they didn’t intend on employing an HIE consultant. However, Johnson says that could change. Only 16 percent of respondents said they would bring on consulting firm to implement their HIE.
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